Asset Management

ASSET MANAGEMENT

ASSET MANAGEMENT

With the ever increasing cost of hotel development, operating costs and over-supply resulting in the threat of diminishing returns, hotel owners and investors are demanding a more hands-on skilled, professional involvement in the long term management of their assets.

Our unique hotel management oversight service has one key objective: Ensuring that our hotel owner’s strategic financial and non financial objectives are met.

HOTEL MANAGEMENT OVERSIGHT (HMO)

Our role:

Providing a comprehensive liaison service between our client and their hotel management team. Being a hotel investor is a complicated task - far more demanding and complex than any other real estate venture. Our asset management services are a comprehensive skill set that includes an understanding and knowledge of hotel operations, management of revenues and costs, dealing with governmental requirements, human resource management, accounting, marketing, economics, the market, and preservation of the asset.

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Key Services at a glance

Financial Performance Monitoring

  • Ongoing financial performance
    • By scheduled reviews of actual performance vs. budget and forecast; benchmarked against the competitor set
  • Owner’s investment performance
    • By assessing cash flow and returns versus the original investment plan, advising on variances
  • Capital expenditure
    • By reviewing annual budget proposals, evaluating expenditure impact on profitability, ensuring that Capital Expenditure is aligned with Owner’s interests
  • Overall asset
    • By evaluating the efficiency and competitiveness of major systems; Regularly inspecting the physical asset and verifying compliance with governmental requirements
  • Review the budgeting process
    • By assessing proposed budgets and operating plans ensuring alignment with the Owner’s best interests and maximization of the asset’s potential
  • Assess the hospitality investment environment
    • In order to advise the Owner on potential exit strategies by tracking sales prices for comparable properties and capitalization rates

Our Asset Management division delivers a comprehensive range of services designed to maximize operational profitability and minimize risk. At the forefront of industry trends, using our understanding of current and future value drivers, we ensure the maintenance, appreciation and profitability of every owner’s asset.

Key Services at a glance

Operational Performance Monitoring

  • Evaluate the sales and marketing process
    • By identifying that the performance is in line with the established competitor set and agreed sales targets;
    • By advising on necessary adjustments to reflect current market conditions
  • Competitive market Tracking
    • By regularly updating comparative data on occupancy, average rates and new supply in the market
  • Advise on management issues
    • By evaluating operational strengths and challenges;
    • By reviewing industry trends and best practice
  • Negotiate and administer contracts
    • By ensuring contract compliance and renegotiation for optimal return on investment
    • We are not reactive: We stay ahead of market trends and generate excellent returns for a growing list of international and MENA based investors.
HOTEL OPERATOR SELECTION

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Pioneers in bringing internationally renowned hotel brands into the Middle East region, to date Ròya has introduced more than 12 international hotel brands and signed over 100 operator contracts on behalf of our clients.

Hotel operator selection is a key factor in the overall success of an investment both in terms of selecting the right partner and putting in place the right terms and conditions. Agreements have to be balanced to permit operators to perform whilst allowing owners to oversee their investments.

We negotiate and deliver the best commercial terms with the right partners to ensure the best results for our clients. Our keen understanding of branding, management structure and the small print of commercial terms allows us to deliver the ideal operator on the best possible terms every time whether for a new agreement or the re-negotiation of an existing contract.

Ròya employs a system-oriented process pre-qualifying the optimum brands for the project in order to find the most suitable operator from our wealth of industry relationships. When identifying brands many factors will be considered, amongst them the strength of the brand and its performance, positioning, regional experience, reservation system and fee structure.

Our top line process

We maximize value from the initiation of the project ensuring that the owner’s vision is appropriately aligned with the objectives of the operator. The first steps are critical and require professional due diligence:-

  • Short list appropriate operators for the property
  • Request proposals from selected operators
  • Evaluate interested operators on key attributes

After the primary operator selection has been made, together with the client’s appointed legal council, we start the process by negotiating the best possible terms and conditions on behalf of the client for the key legal agreements:

  • Memorandum of Understanding
  • Technical Services Agreement
  • Hotel Management Agreement
MERGERS, ACQUISITIONS AND DISPOSALS

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At all stages of the M&A process, Ròya International seeks to maximize the value of the asset, whether it is a disposal of a hotel property that may be underperforming, or an acquisition of a new opportunity that presents a high value interest. 

Ròya’s M&A team operates as an objective partner from the initial assessment to closing the transaction in a timely and efficient manner. Roya helps ensure that the M&A plan is the result of a carefully developed strategy, not just a deal driven reaction. 

Our confidential service, conducted by our team of industry professionals, focuses on assisting clients in the development of a strategy and financial rationale for any merger, acquisition or disposal. We have brokered joint venture agreements between private companies and government institutions and work closely with financial institutions in managing hospitality real estate funds. We have done complex M&A agreements in the MENA region and countries such as the UK, Pakistan, Seychelles and Maldives.

The Ròya M&A Process

Our approach means we listen and understand our client’s investment needs and objectives, while holistically reviewing the project’s credentials to create a broad investment strategy. The decision to sell a property or business is one which many owners make once, with only one chance to get it right. We guide our clients through each and every stage of the transaction to help ensure that they achieve the best terms and conditions possible.

Our team of professionals applies industry and market expertise, evaluating market conditions and the property itself, in order to best position the asset.

Throughout the process Ròya continually assesses the due diligence and relevant documentation against the objectives agreed at the outset, in order to provide sound investment advice for our clients. Ròya has the capability and experience to successfully manage the process from initial assessment to closing the transaction in a timely an efficient manner.

  • Initial assessment
  • Positioning period
  • Negotiations strategy
  • Due diligence & closing of the transaction
REAL ESTATE ADVISORY

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With our extensive knowledge of the real estate sector, we are often asked by clients to assist in maximizing the positioning of their real estate portfolio.

We ensure the optimal level of occupancy and income using our market knowledge and expertise to identify suitable and potential tenants, conducting due diligence to ensure that our clients expectations for the asset are achieved.

Together with the client’s legal counsel at the outset of negotiation, we oversee the following:

  • That the value of the leasing opportunity is maximized
  • Anticipating of tenant fit-out issues and generation of the correct documentation
  • Maintaining the asset value by creating the framework for payment protocols, maintenance and future fit outs.

Key Services at a glance

  • Real estate development strategy
  • Real estate marketing, sales, pricing and leasing strategy
  • Real estate product positioning
  • Best mixed use
  • Appointment of property managers